The Standard & Poor's 500-stock index dropped 18.99 points, or 1.2%, to 1511.95. Wednesday's tumble—its biggest since November—comes after the S&P 500 banked its highest close since 2007 on Tuesday. The Nasdaq Composite Index lost 49.19 points, or 1.5%, to 3164.41.

Major indexes sank to session lows after the release of minutes from the Fed showed that officials worried last month the central bank's easy-money policies could lead to instability in financial markets, and might be hard to pull back in the future.

The Fed's "policy of printing money is still entrenched, but they're thinking more about how to get out," said
Rick Fier,
director of equity trading Conifer Securities. "It kind of puts them between a rock and a hard place."

Stimulus measures from the Fed have been cited as a key factor for stock gains in recent years, and investors were watching closely for signs of a change in direction. The programs aim to spur economic growth by lowering long-term interest rates.

"The journey to higher interest rates is going to be a long and arduous process," said Terry Sandven, chief equities strategist at U.S. Bank Wealth Management. "Year to date, [stock] gains have been superb and above expectations, so it stands to reason that the market will take a bit of pause."

All 10 of the S&P 500's sectors fell, led by materials stocks such as
Alcoa
.
Caterpillar
was among the worst-performing stock on the Dow, falling after the heavy-machinery maker's rolling three-month sales numbers in January fell 4% from the month earlier.

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Apple
fell after
Foxconn Technology Group
,
which assembles consumer electronics for a broad range of customers including Apple, said it was freezing hiring of assembly-line workers in China.

Shares of
Office Depot
and
OfficeMax
each dropped, cutting in to strong gains for each on Tuesday. Office Depot said Wednesday it agreed to buy OfficeMax in an all-stock deal that values the rival office-supplies retailer at roughly $1.19 billion. Under the companies' definitive agreement, Office Depot will issue 2.69 new shares for each OfficeMax share outstanding.

On the economic front, new residential construction dropped more than expected in January from the month earlier, although December's construction figure was revised upward, the Commerce Department said. Meanwhile, the number of new building permits rose last month to the highest level since June 2008.

In the Markets

Wholesale prices rose by 0.5% in January, or more than expected. Excluding food and energy costs, which tend to be volatile, prices rose 0.2%, in line with expectations, according to the Labor Department.

European markets eased. The Stoxx Europe 600 slipped 0.3% after minutes of the latest Bank of England meeting showed that some voices within the central bank had pushed for additional stimulus.

Commodities suffered broad losses. Front-month February gold futures shed 1.6% to settle at $1,577.60 a troy ounce, its lowest level since July. March crude-oil futures slumped 2.3% to settle at $94.46 a barrel. The dollar rose against the euro but fell versus the yen. The yield on benchmark 10-year Treasury bonds fell to 2.018%, as demand rose.

Toll Brothers
declined after the luxury-home builder reported fiscal first-quarter earnings and revenue that fell short of expectations, amid year-over-year declines in the average prices of homes delivered and of net signed contracts.

Garmin
lost after the navigation-systems maker's fourth-quarter earnings and revenue missed expectations, amid slowing demand in its automotive business

La-Z-Boy
leapt after posting a quarterly earnings gain, as the furniture company reported higher revenue and saw its retail segment swing back to profitability.

Demand Media
gained after the company said it was exploring splitting up into two publicly-traded companies by spinning off its domain business from its media business. The company also reported better-than-expected fourth-quarter earnings and revenue.

Millennial Media
plunged after the mobile-advertising and data company reported fourth-quarter earnings that topped estimates but revenue that fell short, and provided a first-quarter revenue outlook that was below current projections.

Harvest Natural Resources
slumped after the energy company said a deal to sell its Venezuela assets to Indonesia's state-owned Pertamina for $725 million was voted down by the Indonesian government.

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